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THE ENERGY EFFICIENCY SUPPLEMENT 2012


Acknowledgement

This publication was funded under the National Strategy for Energy Efficiency and is a joint initiative of

Australian State and Territory Governments. The publication should be attributed to the National Centre for

Sustainability, Swinburne University of Technology.

The National Centre for Sustainability, Swinburne University of Technology would like to acknowledge the

NFEE Training Committee and industry contributions during the development of this publication.

Cover Design by Zach Bresnahan

Instructional Design and Diagrams by Justin Yong

© Sustainability Victoria 2012

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Contents

Energy Use .............................................................................................................................................. 1

World .................................................................................................................................................. 1

Australia .............................................................................................................................................. 2

States and Territories .......................................................................................................................... 2

Industry Sectors .................................................................................................................................. 4

Households ......................................................................................................................................... 6

The Case For Energy Efficiency ............................................................................................................... 7

The Business Case ............................................................................................................................... 7

The Social Case .................................................................................................................................. 10

The Environmental Case ................................................................................................................... 10

Legislation ......................................................................................................................................... 12

Some of the relevant legislation includes: .................................................................................... 12

Energy Efficiency Opportunities Across the Australian Economy ......................................................... 15

Energy Efficiency In The Industry Sector ........................................................................................... 17

Energy Efficiency In The Buildings Sector ......................................................................................... 19

Energy Efficiency In The Transport Sector ........................................................................................ 21

Energy Efficiency In The Power Sector .............................................................................................. 22

Energy Efficiency In The Waste Sector .............................................................................................. 23

Using Energy More Wisely .................................................................................................................... 25

Energy Conservation And Energy Efficiency ..................................................................................... 25

Jevons’ paradox................................................................................................................................. 26

Energy Management ......................................................................................................................... 27

Energy audits for business ............................................................................................................ 27

Home energy audit ....................................................................................................................... 28

Identifying opportunities .............................................................................................................. 31


Making changes ............................................................................................................................ 32

Cost/Benefit Analysis ............................................................................................................................ 33

Return on Investment ....................................................................................................................... 33

Change management ........................................................................................................................ 34

Eco-efficiency and resource efficiency ................................................................................................. 36

Lean enterprises ............................................................................................................................ 37

Understanding the life cycle of products and services ..................................................................... 37

Embodied energy .......................................................................................................................... 40

Waste energy .................................................................................................................................... 41

Sustainable consumption and purchasing ........................................................................................ 44

Benefits of sustainable purchasing ............................................................................................... 45

References ............................................................................................................................................ 47

THE ENERGY EFFICIENCY SUPPLEMENT 2012 1

Energy Use

World

Energy use around the world can be calculated at a per capita level or at a total level (e.g. by country

or region). Over the past two decades, total energy consumption has almost doubled (Figure 1). The

share of total energy consumption for countries in the Organisation for Economic Development

(OECD) group (which includes Australia) has declined but overall energy consumption has still

increased, and is projected to keep increasing. Non-OECD countries, of which there are around 150

(compared to 34 OECD member countries), have rapidly increased their share of world energy

consumption since 2000 (Figure 1), and now contribute the greatest share of the increased total

consumption as their economies industrialise and their populations are lifted out of poverty.

The share of total energy consumption has more than doubled in rapidly developing countries such

as China and the rest of Asia (Figure 2). This is due to the large population, growing economy and the

increasing energy-intensive lifestyle associated with such a transition. The increase in Africa and

Latin America has been much smaller to date but the larger countries of Latin America (e.g. Brazil)

have seen sustained levels of economic growth over the past decade that is increased the demand

for energy.

Figure 1: World energy consumption, 1990-2035 (quadrillion Btu)1

Source: U.S Energy Information Association (2011) International Energy Outlook 2011. © Fig 12

http://205.254.135.7/forecasts/ieo/world.cfm Accessed 14.06.12

1 Btu stands for British thermal unit, and is the energy needed to raise the temperature of one pound of

water by 1 °F at a constant pressure of one atmosphere (which equates to around 1055 joules).

http://205.254.135.7/forecasts/ieo/world.cfm


Figure 2: 1973 and 2008 regional shares of total final consumption*2

Source: International Energy Agency (2010) Key World Energy Statistics. © p30

http://www.iea.org/textbase/nppdf/free/2010/key_stats_2010.pdf Accessed 14.06.12

Australia

Australia ranks as the world’s eighteenth largest energy consumer and fourteenth on a per capita

basis (Bureau of Resources and Energy Economics, 2012). 95% of Australia’s energy consumption

comes from non-renewable resources, and only 5% from renewables (compared to around 13%

renewables as total share of global energy supply).

Though energy consumption continues to increase, the energy intensity (energy consumption per

unit of gross domestic product) of the Australian economy has been declining. This is a result of:

energy efficiency improvements from technological change and fuel switching (driven by

Government policies at State and National level)

increased share of GDP from less intensive service sectors of the economy, compared to

manufacturing

States and Territories

Energy consumption is highest in the eastern seaboard States, followed by Western Australia (Figure

3). Tasmania, with its relatively large hydroelectricity generation, has the largest percentage (28%) of

its generation from renewable sources of energy (Figure 4). Queensland has the second highest

share of renewable generation (8%) consisting largely from bagasse (waste sugar cane).

2 Mtoe stands for one million tonnes of oil equivalent. Tonnes of oil equivalent (toe) is a unit of energy that is

equal to the amount of energy released by burning one tonne of crude oil (which is approximately 42 gigajoules, or 42 billion joules).

http://www.iea.org/textbase/nppdf/free/2010/key_stats_2010.pdf


Figure 3: Percentage of total Australian net

energy consumption by State/Territory* in

2009-10

* ACT consumption included in NSW total

Source: Data from Australian Bureau of Statistics State and Territory

Statistical Indicators (1367.0) 2012.

http://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/

1367.0~2012~Main%20Features~Australia%20Home~1 Accessed

14.06.12

Figure 4: Share of renewable energy in

total energy supply* by State/Territory

2009-10

Source: Data from Table 4, Bureau of Resources and Energy

Economics (2012). Energy in Australia.

http://www.bree.gov.au/publications/energy/index.html

Accessed 14.06.12

* Total supply includes coal, gas & petroleum products

Why is the energy consumption of West Australia so large?

West Australia, with a population of 2,387,000, has nearly three times the energy consumption of

South Australia, with a population of 1,645,000. The main reason for the larger share of total energy

consumption is the energy used by the mining sector which forms a big part of the West Australian

economy. The mining industry uses a diverse range of energy intensive processes such as drilling and

excavation, mine operation, material transfer, mineral preparation and separation. The mining

industry is researching and identifying ways to reduce energy use and become more energy efficient.

For example, the use of remote sensing can minimise exploratory digging and drilling in the

exploration phase. There are also opportunities to improve haulage efficiency, maintenance

practices, equipment use, lighting systems, process control, waste heat recovery and use in the

operational phase of mine sites.

Source: 3101.0 - Australian Demographic Statistics, Dec 2011 http://www.abs.gov.au/ausstats/[email protected]/mf/3101.0/ Accessed 26.06.10;

Mining and Energy http://www.cleantechinvestor.com/portal/fuel-cells/6422-mining-and-energy.html Accessed 26.06.10; Mining Energy

Efficiency Opportunities http://www.ret.gov.au/energy/efficiency/eeo/industry-sector/mining/Pages/Mining%20Sector.aspx Accessed

26.06.10

http://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/1367.0~2012~Main%20Features~Australia%20Home~1



http://www.abs.gov.au/ausstats/[email protected]/mf/3101.0/

http://www.cleantechinvestor.com/portal/fuel-cells/6422-mining-and-energy.html%20Accessed%2026.06.10

http://www.ret.gov.au/energy/efficiency/eeo/industry-sector/mining/Pages/Mining%20Sector.aspx


Industry Sectors

Electricity generation and transport dominate the energy consumption by industry sectors in all

States and Territory except for Tasmania, where most of the electricity generation is from hydro

(Figure 5). In other jurisdictions where coal is the major fuel source for electricity generation, a lot of

energy is consumed in generating electricity. Transport consumes a lot of petroleum products.

Mining is a large consumer of energy compared to other sectors in Western Australia and the

Northern Territory. Manufacturing has the highest share of energy consumption in Tasmania.

Figure 5: 2009 – 10 Energy consumption by top 5 industry sectors

NSW (including ACT)

Victoria

Queensland

West Australia

South Australia

Tasmania


Northern Territory

Source: from Australian Bureau of Statistics State and Territory

Statistical Indicators (1367.0) 2012. © Commonwealth of Australia.

http://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/13

67.0~2012~Main%20Features~Australia%20Home~1 Accessed

14.06.12




Households

The residential sector accounts for around 11% of Australian energy consumption (Figure 6). The

main energy end uses are:

Appliances

Space heating

Water heating

There have been large increases in the energy consumption share from appliances, driven by the

large increase in demand for home entertainment and personal IT equipment, along with lighting.

Though the Australian population has grown, and the average size of homes has increased, the

average consumption per household has decreased slightly by 0.3% over the period of 1989–90 to

2009–10. Energy consumption per household is expected to continue declining, where 2020 levels

will be 6% below 1990 levels. The forecast decrease in residential energy intensity is driven by

improvement in dwelling thermal performance (reducing the need for heating and cooling) and

changes in hot water heating (fuel shift from electric to gas and solar)3.

Figure 6: Energy consumption in household end uses, 1989-90 to 2009-10

Source: Bureau of Resources and Energy Economics (2012). Economic Analysis of End-use Energy Intensity in Australia.

http://www.bree.gov.au/publications/energy/index.html Accessed 14.06.12

3 Department of Environment, Water, Heritage and the Arts (2008). Energy Use in The Australian Residential

Sector 1986 – 2020. http://www.climatechange.gov.au/what-you-need-to-know/buildings/publications/energy-use.aspx Accessed 18.06.11


http://www.climatechange.gov.au/what-you-need-to-know/buildings/publications/energy-use.aspx



The Case For Energy Efficiency

Energy efficiency makes business sense as it can reduce costs and therefore increase profits, as well

as improve an organisation’s reputation amongst its stakeholders, which can in turn lead to

improved market share or business opportunities. As well as the financial benefits, energy efficiency

has environmental benefits in terms of reduced greenhouse gas emissions and other pollutants

when energy is generated from fossil fuels (Figure 7). Energy efficiency can also have social benefits,

such as job creation and the development of new industries, and improved health through better

thermal conditions in buildings that reduce the need for active heating and cooling.

Figure 7: Multiple benefits of energy efficiency

Source: Campbell, N (2012). Spreading the Net: The Multiple Benefits of Energy Efficiency © OECD/IEA 2012. Presentation at the

International Energy Agency (IEA) Energy Efficiency Week, 14 March 2012.

http://www.iea.org/media/workshops/2012/energyefficiency/Campbell.pdf Accessed 18.06.12

The Business Case

There are a number of business reasons to consider energy use in business planning and decision-

making, including:

Resource efficiency and cost savings

Compliance with legislation, regulations and industry standards

Marketing and stakeholder engagement (developing a point of difference to competitors)

http://www.iea.org/media/workshops/2012/energyefficiency/Campbell.pdf


Energy efficiency can save money over the short and long term. Short term gains can be achieved

through simple measures such as switching off appliances and equipment when not in use, changing

settings, or changing behaviours to operate equipment more efficiently.

Capital investment in new or more energy efficient technology can lead to energy efficiency gains

that offset the cost of the investment over a longer period (discussed later in this supplement under

‘return on investment’). Changes in buildings can also yield energy efficiency gains, as can changes in

transportation, whether this is from more energy efficient vehicles, fuel switching, or changing

modes of travel such as using public transport, cycling, or walking.

The business case for energy efficiency is relevant to all sizes of business across all sectors, as well as

to energy utilities. The increasing demand for energy, and the temporary spikes in peak demand

means that utilities need to invest in new infrastructure or improve ageing transmission networks to

cater for the load. This is a costly exercise and the costs are passed on to the consumers.

What contributes to the cost of electricity?

The price of electricity is determined by a number of factors such as transmission and distribution

network costs, the wholesale electricity price faced by retailers, and government policies. Recently, a

major driver of rising retail electricity prices has been the significant investment in new and ageing

transmission and distribution infrastructure required to support increasing demand for electricity.

The Australian Energy Market Commission estimates that transmission and distribution network

costs represented between 44 to 53 per cent of the retail electricity price faced by households in

2009–10, with wholesale electricity prices representing a further 35 to 40 per cent.

Source: Bureau of Resources and Energy Economics (2012). Energy in Australia, page 40.


Energy efficiency can lead to economy-wide cost savings through a reduced need to invest in costly

energy infrastructure. Energy infrastructure costs are largely driven by peak demand. Peak demand

refers to the maximum energy demand that is placed on the electricity grid at any one time. Peak

demand occurs on a few extremely hot days per year when households run air conditioners, along

with the normal demand from business and industry. Electricity distributors need to invest in costly

infrastructure (poles, wires, transformers, substations) to cater for such demand that only occurs a

small percentage of the year. These infrastructure costs are passed on to consumers, and increases

in energy costs are mostly from infrastructure upgrades. Governments and electricity generators are

now investing in demand side management and energy efficiency to better manage peak demand

and to reduce or defer the need for costly infrastructure upgrades (see Figure 8 for the Magnetic

Island peak demand trial as part of the Townsville: Queensland Solar City Project).



Figure 8: Reduction in peak demand from energy efficiency initiatives on Magnetic

Island, Queensland

Source: Townsville: Queensland Solar City (2011). Annual Report. ©

http://www.townsvillesolarcity.com.au/Portals/0/docs/Townsville%20Solar%20City%20Annual%20Report%202011_final_distribution.pdf

Accessed 15.06.12

Energy efficiency improvements provide an opportunity for homes and businesses to source all or a

majority of their energy from on-site renewable energy generation. Households and businesses that

operate ‘off-the-grid’ (i.e. rely solely on on-site generation) need to be extremely energy efficient to

minimise their overall energy consumption needs. Reduced consumption means that their capital

investment in energy generation infrastructure (such as solar panels) can be minimised.

Example of an energy independent tourism business

Hidden Valley Cabins- http://www.hiddenvalleycabins.com.au/solar_power.htm

At a national and international level, greater energy efficiency can lead towards energy security as

countries are no longer reliant on overseas suppliers of petrol, gas or uranium. This can lead to

reduced opportunity for international conflict to secure energy sources.

At a local level, greater energy efficiency can lead to distributed generation being more viable.

Distributed generation refers to localised generation such as through small-scale solar or wind-farms

or co/tri-generation systems and fuel cells. Distributed generation, compared to centralised

generation (which is the traditional form of energy supply), has a number of benefits such as greater

reliability and security from transmission faults (e.g. where a pole or transformer a long distance

away falls down or catches fire).


http://www.hiddenvalleycabins.com.au/solar_power.htm


Smart grids and energy efficiency

Energy efficiency can also be achieved by investment in smart grids. Smart grids combine the

existing electricity distribution networks with advanced communication, sensing and metering

infrastructure to improve the way energy is supplied, faults detected deducted and rectified. Smart

grids can also allow people or electricity network companies to remotely control smart appliances in

order to reduce their demand during certain periods, or turn smart appliances off completely. For

example, Ergon Energy (Queensland) has piloted load controllers on air-conditioning units that

allows Ergon to remotely send signals to adjust the temperature setting, and therefore reduce the

energy consumption of those appliances, during peak demand periods4.

The Social Case

Energy efficiency can create new jobs in maintenance and servicing of existing equipment as well as

in manufacturing of new technologies and the building sector (new homes and retrofitting existing

homes). There are also jobs in the research and development (R&D) phase. In addition, energy

efficiency can lead to increased energy affordability and poverty alleviation by mitigating the

impacts of energy price rises. Financial savings from energy efficiency improvements can lead to

increased disposable income which can lead to increased consumer spending, benefitting the wider

economy and society.

Improved thermal (temperature) conditions in buildings (residential and commercial) can also lead

to improved health outcomes as there is less need for active heating and cooling (reduced

temperature fluctuations, reduced drying of the ambient air, reduced movement of dust and other

particulates). Energy efficiency measures such as improved day-lighting can also lead to increased

productivity and improved moods.

The Environmental Case

Energy efficiency and energy conservation have a number of environmental benefits, the clearest

being a reduction in greenhouse gas emissions where generation comes from fossil fuel sources. In

Australia, greenhouse gas emissions have increased by about 20% over the past two decades. The

increase is across most sectors of the economy, except for waste and agriculture (Figure 9).

4 Climate Works 2012. How to make the most of demand management.

http://www.climateworksaustralia.com/Improving_impact_measurement.pdf Accessed 26.06.12

http://www.climateworksaustralia.com/Improving_impact_measurement.pdf


Figure 9: Percentage change in emissions by sector since 1990, Australia, years to

June quarters, 1990-2011

Source: Department of Climate Change and Energy Efficiency. (2011) Australian National Greenhouse Accounts, Quarterly Update of

Australia’s National Greenhouse Gas Inventory, December Quarter 2011.

http://www.climatechange.gov.au/en/publications/greenhouse-acctg/national-greenhouse-gas-inventory-2011-12.aspx Accessed

18.06.12

NB: Stationary energy refers emissions from fuels consumed in the manufacturing, construction and commercial sectors and domestic

heating. Fugitive emissions refers to emissions associated with the production, processing, storage, transmission and distribution of fossil

fuels such as coal, oil and natural gas.

The Garnaut Review5, a comprehensive report on climate change impacts and response options for

Australia, indicated that the cost of inaction (i.e. not curbing greenhouse gas emissions) would far

outweigh the cost of a comprehensive plan to tackle emissions. In short, a failure to take action now

will mean that the environmental and social impacts of climate change will be borne by future

generations, and businesses and households in the future will have disproportionately higher costs

compared to taking action now at a lower overall cost to society.

Beyond greenhouse gas emissions, there are a number of other pollutants associated with energy

generation. For example, burning coal also releases oxides of sulphur (SOx) and nitrogen (NOx) that

are associated with acid rain, air particulates and trace elements such as mercury which is

particularly harmful to the environment and human health at certain levels. In addition, diesel

particulates, released from vehicles or diesel generators, are a potential cancer causing agent and

can also lead to respiratory ailments. This is particularly important in closed or constrained

environments such as mine sites. In such cases, energy efficiency, energy conservation, and

alternative power sources can bring multiple benefits.

5 The Garnaut Review http://www.garnautreview.org.au/

http://www.climatechange.gov.au/en/publications/greenhouse-acctg/national-greenhouse-gas-inventory-2011-12.aspx

http://www.garnautreview.org.au/


Environmental benefits of energy efficiency are not just from a reduced need for fossil fuel. There

are environmental benefits accrued from reducing the need to expand or build new power stations

and hydro-electric dams, which are known to have environmental impacts (flooding valleys, altered

water flows) and social impacts (displaced communities).

Legislation

A variety of legislation covering resource efficiency exists at the Commonwealth and State levels.

The legislation generally applies to the very largest companies in Australia and requires them to

report on their energy consumption and greenhouse gas emissions (NGER), and identify energy

efficiency opportunities (EEO).

Some of the relevant legislation includes:

Jurisdiction Scheme

Commonwealth National Greenhouse and Energy Reporting (NGER)6 Energy Efficiency Opportunities (EEO)7 Commercial Building Disclosure Scheme (CBD)8

6 http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/Pages/default.aspx

7 http://www.ret.gov.au/energy/efficiency/eeo/pages/default.aspx

8 http://www.cbd.gov.au/

National Greenhouse and Energy Reporting Act 2007

The National Greenhouse and Energy Reporting Act 2007 (NGER Act) introduced a single national

framework for the reporting and dissemination of information about the greenhouse gas

emissions, greenhouse gas projects, and energy use and production of corporations.

The objectives of the NGER Act are to:

underpin an emissions trading scheme

inform government policy formulation and the Australian public

help meet Australia’s international reporting obligations

assist Commonwealth, state and territory government programs and activities, and

avoid the duplication of similar reporting requirements in the states and territories.

Corporations that meet an NGER threshold must report their:

greenhouse gas emissions

energy production

energy consumption, and

other information specified under NGER legislation.

Source: http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/Pages/default.aspx

http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/Pages/default.aspx

http://www.ret.gov.au/energy/efficiency/eeo/pages/default.aspx

http://www.cbd.gov.au/

http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/Pages/default.aspx


Victoria Environment and Resource Efficiency Plans (EREP) Program9

Victorian Energy Efficiency Target (VEET) scheme10

New South Wales NSW Energy Action Plans (ESAP)11 NSW Energy Saving Scheme (ESS)12

Queensland Smart Energy Savings Program13

South Australia Residential Energy Efficiency Scheme (REES)14

9 http://www.epa.vic.gov.au/bus/erep/

10 https://www.veet.vic.gov.au/Public/Public.aspx?id=Home

11 http://www.environment.nsw.gov.au/sustainbus/savingsactionplans.htm

12 http://www.ess.nsw.gov.au/

13 http://www.business.qld.gov.au/running/environment/energy-saving-ideas/smart-energy-saving-programs

14 http://www.dtei.sa.gov.au/energy/government_programs/rees

http://www.epa.vic.gov.au/bus/erep/

https://www.veet.vic.gov.au/Public/Public.aspx?id=Home

http://www.environment.nsw.gov.au/sustainbus/savingsactionplans.htm

http://www.ess.nsw.gov.au/

http://www.business.qld.gov.au/running/environment/energy-saving-ideas/smart-energy-saving-programs

http://www.dtei.sa.gov.au/energy/government_programs/rees



Energy Efficiency Opportunities Across the Australian Economy

Climate Works Australia15 has developed a marginal abatement cost curve (MACC) that covers the

Australian economy as a whole. MACCs have also been developed for specific regions and specific

sectors. In order to reach a 25% cut in emissions by 2020 (from 2012 levels), energy efficiency

opportunities have been identified as offering the least cost options that can contribute to just over

one-fifth of the emission reduction target (Figure 10). The opportunities include energy efficiency

across different sectors, land management practices (agriculture and forestry) and new energy

generation technologies in the power sector.

How to read the MACC

The width of each column represents the GHG reduction potential of an opportunity in 2020

compared to the emissions forecast under the business-as-usual (BAU) case. The height of each

column represents the average cost for that activity of abating a tonne of CO2e in 2020. All costs are

in 2010 real Australian dollars (A$), and the graph is ordered left to right from the lowest cost to the

highest cost opportunities.

Figure 10: Investor* cost curve for marginal abatement opportunities to reach 25%

emission cut by 2020

15

http://climateworks.org.au/

http://climateworks.org.au/


Source: ClimateWorks Australia (2011). Low Carbon Growth Plan for Australia, Impact of the Carbon Price Package. August 2011 Revised

Edition. http://www.climateworksaustralia.org/LCGP_Impact_of_the_carbon_price_package_Aug_2011_revised_edition.pdf Accessed

20.06.12

* The investor cost curve reflects the net direct cost faced by a company or consumer to implement an emissions reduction opportunity.

The breakdown of abatement potential by sector is represented in Figure 11.

Figure 11: Australian 2020 abatement potential by sector

Source: ClimateWorks Australia (2010). Low Carbon Growth Plan for Australia. March 2010.

http://www.climateworksaustralia.com/Low%20Carbon%20Growth%20Plan.pdf Accessed 20.06.12

The full list of opportunities for each sector is available from the Low Carbon Growth Plan for

Australia. http://www.climateworksaustralia.com/low_carbon_growth_plan.html

Analysis by ClimateWorks Australia suggests that the Clean Energy Package (carbon price and

associate measures) will unlock a total of 52 MtCO2e of carbon abatement opportunities from

energy efficiency across the industry, building and transport sectors (Table 1).

Table 1: Total carbon abatement from energy efficiency opportunities

Sector Associated abatement

(MtCO2e)

Industry 27

Buildings 23

Transport 2

Source: ClimateWorks Australia

http://www.climateworksaustralia.org/LCGP_Impact_of_the_carbon_price_package_Aug_2011_revised_edition.pdf

http://www.climateworksaustralia.com/Low%20Carbon%20Growth%20Plan.pdf

http://www.climateworksaustralia.com/low_carbon_growth_plan.html


Energy Efficiency In The Industry Sector

Opportunities in the industry sector include:

improved control systems and processes

reduction of duplicated or oversized equipment

upgrade of motor systems,

decrease of energy losses in boilers and steam distribution systems

waste heat recovery for pre-heating or other uses

building utilities.

The most affordable opportunities for energy efficiency in the industry sector occur in the cement

and food, beverage and tobacco industries (Figure 12).

Figure 12: 2020 Industry GHG emissions reduction investor cost curve





Case study: Cement Australia

Cement Australia replaced a constant speed fan and damper system with a variable frequency fan at

its Bulwer Island site. The net annual energy savings were calculated at 0.426 GJ with a payback of

1.5 years.

Source: Cement Australia (2011). Energy Efficiency Opportunities Public Report 2011.

http://www.cementaustralia.com.au/wps/wcm/connect/website/cement/resources/fad8f700497cb1a7943c96efc448b82a/EEO-

PublicReport-2011.pdf Accessed 18.06.12

http://www.cementaustralia.com.au/wps/wcm/connect/website/cement/resources/fad8f700497cb1a7943c96efc448b82a/EEO-PublicReport-2011.pdf%20Accessed%2018.06.12

http://www.cementaustralia.com.au/wps/wcm/connect/website/cement/resources/fad8f700497cb1a7943c96efc448b82a/EEO-PublicReport-2011.pdf%20Accessed%2018.06.12


Energy Efficiency In The Buildings Sector

The Low Carbon Growth Plan for Australia outlines a number of opportunities in the building sector,

including lighting retrofits, appliance and equipment retrofits, and waste energy reduction (Figure

13).

Figure 13: 2020 Buildings GHG emissions reduction investor cost curve





Case study: GPT Group

The GPT Group, which owns, manages and develops commercial property, has achieved 28%

reduction in energy intensity since 2005. The cost savings in 2011(related avoided costs compared to

2005 baseline) alone equated to $10.2 million of electricity and $464,000 of gas.

Source: GPT Group. Climate Change and Energy http://www.gpt.com.au/content.aspx?urlkey=Energy Accessed 18.06.12

Video case study on the upgrade of a commercial office space by the GPT property group.

http://www.youtube.com/embed/ZafIi7ukZ70

http://www.gpt.com.au/content.aspx?urlkey=Energy




Energy Efficiency In The Transport Sector

Fuel efficiency in conventional internal combustion engines provides the largest (68%) abatement

opportunity from the transport sector (Figure 14). There are also significant opportunities to reduce

emissions through behaviour changes such as increased use of public transport, car-pooling, and

cycling or walking.

Figure 14: 2020 Transport GHG emissions reduction investor cost curve



The Green Vehicle Guide rates new Australian vehicles based on fuel efficiency, greenhouse gas and

air pollution emissions. http://www.greenvehicleguide.gov.au


http://www.greenvehicleguide.gov.au/


Energy Efficiency In The Power Sector

Improved coal and gas power plant thermal efficiencies and reduced transmission and distribution

losses are opportunities that offer net savings in the power sector. Switching to renewable or less

greenhouse intensive generation requires more investment, but the introduction of a carbon price

will increase the viability of such opportunities.

Case study: Smart Grid, Smart City Trial

Newcastle (NSW) along with other locations in NSW form the Smart Grid, Smart City trial that is

funded by the Department of Resources, Energy and Tourism in partnership with Ausgrid. A smart

grid combines the traditional pole and wires distribution network with communications, sensing and

metering technology to form a two-way interactive and intelligent network. The trial includes

household monitoring systems, better monitoring and measuring devices to improve the reliability

and efficiency of the electricity network, and distributed storage and generation devices, including

fuel cells and battery storage.

Source: http://www.smartgridsmartcity.com.au/

http://www.smartgridsmartcity.com.au/


Energy Efficiency In The Waste Sector

The waste sector produces around 15 million tonnes of carbon pollution each year, equivalent to 3

percent of Australia’s emissions. Reducing waste to landfill through better purchasing decisions

(reducing packaging and waste) and increased reuse and recycling of material are easy and practical

steps to undertake. Practices such as reducing waste can save energy and bring environmental

benefits, as this reduces the need to transport waste to landfill (and the associated fuel use and

particulate and greenhouse gas emissions) and also reduces methane generation at the landfill (and

the associated greenhouse gas emissions). There are also flow on effects in terms of reduced land

use for landfills, and reduced impacts on ecosystems.

Energy efficiency opportunities in the hotel industry sector

http://www.ret.gov.au/energy/Documents/energyefficiencyopps/res-material/hotels-report.pdf

http://www.ret.gov.au/energy/Documents/energyefficiencyopps/res-material/hotels-report.pdf



Using Energy More Wisely

Energy Conservation And Energy Efficiency

Energy conservation refers to activities that aim to reduce the overall use of energy, such as through

ceasing activities. For example, turning off an appliance or equipment when it is not required leads

to energy conservation. Turning off a vehicle engine rather than letting the motor idle is also energy

conservation.

Energy efficiency refers to reducing the use of energy for a certain activity, where the level of output

is maintained (i.e. doing the same with less). For example, replacing an incandescent light globe with

a compact fluorescent globe, whilst maintaining the same level of light output, leads to energy

efficiency. Replacing a vehicle with a newer more energy efficient engine that uses less fuel per

kilometre travelled leads to energy efficiency.

The International Energy Agency (IEA) has identified 25 energy efficiency policy recommendations

that include cross-sectoral and specific opportunities. The IEA provides a range of information on

energy efficiency opportunities including technical guides to assist implementing specific

opportunities. For more information, visit http://www.iea.org/efficiency/

Conservation as opposed to energy efficiency

To illustrate energy efficiency versus conservation, consider the following statements:

A fluorescent tube is more energy efficient than an incandescent light globe due to the properties of

its design. We can’t improve the efficiency of the globe ourselves, but we can buy a tube and thus be

more efficient in our production of light. We’ve reduced the amount of energy (electricity) used to

create a given amount of light.

However, if we leave that tube (light) switched on when we really don’t need it (i.e. during daylight

hours, or when we are out of the room) then no matter how efficient that tube is, we’ve wasted

100% of the energy it used.

In the former we have achieved an energy efficiency gain of around 70% because we used improved

technology. But in latter we still have a conservation opportunity because that light could be

switched off.

In other words, conservation is a human concern (i.e. employs behaviour change), whereas

efficiency is a technological concern (i.e. employs improved design of equipment/systems).

http://www.iea.org/efficiency/


However, these definitions can become a little blurred. Consider that we could install an automated

light switch to fix the lighting problem above. Is that conservation or efficiency based on the

definitions provided above?

Energy efficiency can lead to energy conservation where the level of activity does not increase.

However, energy efficiency can also lead to greater use of energy if more equipment or appliances

that use energy are installed or put in service.

It is usually recommended that conservation measures should be given the higher priority since they

may often have the greatest benefits for the least cost and complexity.

Energy Savings

For energy saving tips around the home, visit the Save Power website

http://www.savepower.nsw.gov.au/households/power-saving-tips/how-to-save-power.aspx

Climate Works Australia have an Energy Efficiency Fact Sheet for opportunities across different

economic sectors http://climateworks.org.au/Energy_efficiency_Fact_Sheet.pdf

Jevons’ paradox

Jevons paradox16 proposes that increased resource efficiency may actually lead to increased

resource use. The original concept related to coal production in the late 1890’s, with Jevon claiming

technological advancements in coal-powered engines which led to more efficient use of coal did not

lead to a reduction in overall coal use, but rather an increase as the demand for coal-powered

engines increased. Essentially, this would be the opposite of the intended outcome and make

conservation futile. This is related to the similar ‘rebound effect’. The increased demand caused by

increased efficiency is named the ‘rebound effect’. If the rebound causes total demand to increase

beyond the gains made by the efficiency measures, then this becomes a ‘backfire’.

In the case of a consumer, increased efficiency brings cost savings and those cost savings may then

be used to purchase more of that same service. For example, increased engine efficiency in a car

means less fuel is used and thus money is saved. The driver may then decide to use the car more

often, or for longer journeys, because driving costs less. A similar prospect is true for manufacturing

industry, where efficiencies may be used to drive higher levels of production (for the same cost) and

thus increase profits but not reduce resource usage.

The Kahzzoom-Brookes postulate17 applied the paradox specifically to energy use in society. The

conclusion is that the effect may be reduced or offset when government intervention, such as taxes

(or other financial disincentives) accompany the efficiency initiative and maintain higher prices. But

behaviour or values change in people may be the key to success. If energy conservation and

efficiency measures are conducted by participants with a deeper knowledge of their benefits and

belief in the reasons why they are needed, then financial outcomes likely to be much less relevant.

16

Alcott, B. (2005) Jevons’ Paradox. Ecological Economics. 54 (1), 1 July: 9 – 21. http://www.sciencedirect.com/science/article/pii/S0921800905001084 Accessed 18.06.11 17

http://en.wikipedia.org/wiki/Khazzoom-Brookes_postulate#cite_ref-accepting_1-1

http://www.savepower.nsw.gov.au/households/power-saving-tips/how-to-save-power.aspx

http://climateworks.org.au/Energy_efficiency_Fact_Sheet.pdf

http://www.sciencedirect.com/science/article/pii/S0921800905001084

http://en.wikipedia.org/wiki/Khazzoom-Brookes_postulate#cite_ref-accepting_1-1


Energy Management

Energy is a resource that leads to the production of goods or services, and like all resources,

reducing its input leads to efficiency gains and cost savings. Australia has benefited from cheap and

abundant supply of energy, but the costs are now rising. The key to energy efficiency is to

understand one’s energy use and subsequently make decisions to better manage it.

Energy management refers to the process of understanding the demand for energy (audit),

identifying opportunities to reduce use, implement new process or technologies, or switch fuel

sources (analysis), and implementing and monitoring changes (action).

Case Studies

Energy Efficiency at Zoos Victoria - http://www.zoo.org.au/energy-efficiency

The Energy Efficiency Exchange provides information for medium and large energy users to identify

energy efficiency opportunities and take action. http://eex.gov.au/

The website includes case studies on energy efficiency opportunities implemented in different

sectors, and information on energy efficiency technologies.

Energy audits for business

Energy audits for businesses are defined in Australia and New Zealand by AS/NZS 3598:2000 Energy

audits standard. The standard is important as it defines uniform parameters which (when applied)

will ensure that audits are comparable across organisations and time.

AS/NZS 3598 defines three levels of audit:

• Level 1 Audit – an overview of energy consumption across a site. Provides an initial

benchmark. Typically in the form of a desktop study. Accuracy within +/-40%.

• Level 2 Audit – identifies energy sources, amount used and where it is used. Identifies areas

of savings. Accuracy within +/-20%.

• Level 3 Audit – provides detailed analysis of energy use, savings potential and the

costs/benefits of implementing the savings. Accuracy within +10% for costs and -10% for benefits.

The levels imply a certain ‘scope’ to apply to the audit, in other words, how ‘deep’ to go. Other

dimensions to scope include which parts of an organisation, its facilities and operations to include.

In certain contexts such as mining and other industries, an Energy Mass Balance (EMB) can be

developed to describe the energy and mass flows in a given process system. EMBs provide a

representation of where energy enters the system, where it is transformed and where it leaves the

system.

http://www.zoo.org.au/energy-efficiency

http://eex.gov.au/


Energy Mass Balance case study: Iluka Resources Limited-

http://www.ret.gov.au/energy/Documents/energyefficiencyopps/res-material/Iluka-Resources-

Ltd.pdf

Sustainability Victoria’s Energy and Greenhouse Management Toolkit (in the form of a modular

suite of guidance documents) is a good online resource. Module 3 Calculating energy use and

greenhouse emissions covers much of the ground required for performing a basic energy audit.

http://www.sustainability.vic.gov.au/resources/documents/EGM_Toolkit.pdf

http://www.sustainability.vic.gov.au/resources/documents/Module2.pdf






Home energy audit

Conducting a home energy audit is a useful step in understanding energy and its wide range of end-

uses. The following steps provide a guide to undertaking an energy audit.

Desktop audit

o Identify all the energy services providers or retailers providing energy to your home (i.e. gas

and electricity etc)

o Gather energy statements or invoices to review energy usage to determine daily, monthly

and/or annual consumption (Figure 15 & 16).

http://www.ret.gov.au/energy/Documents/energyefficiencyopps/res-material/Iluka-Resources-Ltd.pdf

http://www.ret.gov.au/energy/Documents/energyefficiencyopps/res-material/Iluka-Resources-Ltd.pdf

http://www.sustainability.vic.gov.au/resources/documents/EGM_Toolkit.pdf








Figure 15: Copies of residential electricity and gas bills

Reading Energy Bills

Energy bills will provide information including past and present ‘reading’ dates, and the consumption

for the period. They will also provide your average daily usage (e.g. kWh per day for electricity).

It is important to note that bills can provide ‘actual’ or ‘estimated’ reading (amounts of

consumption). This type of inaccuracy can occur whether the data is provided by the retailer or the

distributor. Energy meters are only required to be physically read once a year.

Figure 16: Copy of a manufacturing business electricity bill

Note in Figure 16 the presence of consumption charges and network charges, including a peak

demand charge. The demand refers to the maximum amount of electrical energy that is being

consumed at a given time. The peak demand can cause a short spike at certain times of the day and

as electricity utilities have to cater for the peak demand and the associated large infrastructure

costs, users are assessed demand charges as part of their normal billing. The demand charge is like a

penalty and can exceed 50% of their total electricity bill (refer back to earlier in the supplement-

‘What contributes to the cost of electricity’). One way to reduce the peak demand is to stagger

turning on equipment or avoid using a number of equipment at the same time if they have a large

power demand.


Walk through audit

o Identify the appliances, equipment or devices which consume energy and the type of energy

consumed

o Collect data on the length of time each is used over a standardised timeframe

o Determine the energy consumption requirements for each appliance, equipment and/or

device, etc and enter that data into a spread sheet (Figure 17)

Note on data plates

It is usually possible to find power rating information for freestanding items (such as electrical

appliances) by locating the data plate, often behind or underneath the item. For electrical items the

rating will be in Watts (W) or kilowatts (kW). Sometimes it is in Amps (A). For gas appliance is may be

in megajoules per hour (MJ/hr).

Data plates for installed items (such as ceiling mounted light fittings and air conditioners) are often

inaccessible. More research will be required, so you need to gather as much data as possible (name,

brand, model etc.) at the time.

When to engage the experts

Energy assessment experts can be engaged to identify the energy demand and efficiency gains for

household or businesses. Part of their service may also include outlining the cost and benefits of

particular energy efficiency or demand-side response actions. Examples include:

o The Association of Building Sustainability Assessors (ABSA) Habitat Partners website

provides links to accredited home assessors. http://www.habitatpartners.net.au/

o The Energy Efficiency Exchange website has information about commercial and industrial

energy assessments. http://eex.gov.au/energy-management/energy-efficiency-

assessments/

http://www.absa.net.au/

http://www.habitatpartners.net.au/

http://www.habitatpartners.net.au/

http://eex.gov.au/energy-management/energy-efficiency-assessments/




Figure 17: An example of a home energy audit spread sheet*

Energy Audit by use (Electricity) Assume cost is $0.21 / kWh

CO2 emission: 1.31 kg / kWh (Victoria)

Source Appliance Type

Power

(watts)

Est time

use

/day

Daily

Energy

(Whs)

kWh /

year

cost /

day

cost /

year

Kg CO2

/year type

Appliance 1300 0.25 325 118.6 0.07 24.91 155

763 0.1 76 27.8 0.02 5.85 36

615 0.18 111 40.4 0.02 8.49 53

555 2 1,110 405.2 0.23 85.08 531

0 0.0 0.00 0.00 0

0 0.0 0.00 0.00 0

0 0.0 0.00 0.00 0

Light 4 x 65 Halogen 260 4 1,040 379.6 0.22 79.72 497 lighting

0 0.0 0.00 0.00 0

0 0.0 0.00 0.00 0

0 0.0 0.00 0.00 0

Microwave 1400 0.16 224 81.8 0.05 17.17 107

0 0.0 0.00 0.00 0

Refrigerator 1,650 602.3 0.35 126.47 789

0 0.0 0.00 0.00 0

Monitor plugged in

switched on 1.2 14 17 6.1 0.00 1.29 8 IT

standby 5 4 20 7.3 0.00 1.53 10 IT

operating 25 6 150 54.8 0.03 11.50 72 IT

0 0.0 0.00 0.00 0

Computer plugged in

switched on 1.2 14 17 6.1 0.00 1.29 8 IT

standby 1.4 4 6 2.0 0.00 0.43 3

operating 65 6 390 142.4 0.08 29.89 186

0 0.0 0.00 0.00 0

0 0.0 0.00 0.00 0

Total 5135 1874 1.08 393.61 2455 * An ‘active’ home audit template is available online for automatic calculations

http://www.swinburne.edu.au/ncs/energy_handbook/home_audit_template_2012_v1.xls

Identifying opportunities

o Review and analyse the information to identify energy conservation and efficiency

opportunities

o Identify and prioritise opportunities to improve energy efficiency and reduce energy demand

requirements, associated costs and GHG emissions

o Liaise with the appropriate licensed trades person and/or carry out changes to

appliances, lights, etc. and/or building shell and insulation

o Review potential behavioural changes to improve energy efficiency.

Standby power

Standby power is that energy that is used by equipment and appliances when they are on but not

performing their intended function. Most electrical items have various levels of operation.

Take a photocopier or printer for example, they typically have modes such as:

printing (in active use)

hot standby (ready to print within a few seconds)

cold standby (ready to print within a minute) These three modes draw standby power

power saver (ready to print within a few minutes)

http://www.swinburne.edu.au/ncs/energy_handbook/home_audit_template_2012_v1.xls


off (power off at the wall)

Gas appliances (such as space heaters and hot water heaters) may have a pilot light which is always

on. This is also a form of standby power.

Making changes

o Implement changes as prioritised (these can be based on cost neutral or low cost, easy

changes first, and working up to capital investment in the longer term)

o Monitor consumption through energy bills to evaluate the outcomes of the actions

undertaken

Energy Monitoring

Monitoring changes in energy consumption can be undertaken in various ways. One way is to keep

track of consumption data on bills. This can be done in spreadsheets or specialised software. The

introduction of smart meters for electricity metering means that users may have access to web

portals from their retailer or distributor that provides access to real-time of slightly delayed

consumption information. Smart meters may also be linked to displays that provide real time

information. Alternatively, there are a range of off-the-shelf electricity monitoring devices that can

be purchased to monitor the consumption of individual appliances or equipment. Larger energy

users may consider installing submetering, where individual circuits can be measured such as hot

water, refrigerators, lighting or air-conditioning/heating.


Cost/Benefit Analysis

Cost/benefit analysis (CBA) is a calculation used to evaluate the worthiness of proposed initiatives.

The calculation compares the total benefits of a proposal with the total cost of each possible

solution to determine which one shows the better financial return, often expressed as a ratio. A

starting point of the process is assessing correctly the expected costs and benefits and stating clearly

any assumptions made in the calculation.

If the expected benefits are greater than the expected costs of a proposal, then the Cost/Benefit is

greater than 1 and has positive outcomes. If the benefits are less than the cost of a proposal, then

the Cost/Benefit is less than 1 and has negative outcomes. The calculation includes many

variables/indicators in the budget for comparisons.

Calculation of Cost/Benefit

Bob Willard has provided Cost/Benefit templates to accompany his book, The Next Sustainability

Wave (2005). These can be viewed at his web site “The business case for sustainability”-

www.sustainabilityadvantage.com

Return on Investment

Return on Investment (ROI) is an approximate method to evaluate the efficiency of an investment or

to compare the efficiency of a number of different investments. The calculation provides the

payback period a particular initiative will take to pay for itself using the stream of savings. Return on

investment is a popular metric because of its versatility and simplicity, however, its application is

restricted to projects with shorter payback periods and it does not provide information about the

total return beyond the payback period. The return on investment (or payback period) is calculated

by:

Return on investment calculation for the upgrade of a lighting system

Number of CFLs = 100

Cost per unit = $9.40

Cost of labour = $420


Initial investment = $940 + $420 = $1,360

Annual energy saving (cost) = $2,171 per year

Therefore,

Payback Period = Initial Investment ($) / annual saving ($ per year)

= $1,360 / $2,171

= 0.6 years

For more information about ways to save energy, visit:

Victorian Save Energy website http://www.saveenergy.vic.gov.au/

Resource Smart website http://www.resourcesmart.vic.gov.au/for_households/energy.html

NSW Savepower website http://www.savepower.nsw.gov.au/

South Australian Energy Efficiency website

http://www.sa.gov.au/subject/Water%2C+energy+and+environment/Energy/Energy+efficiency

These websites provides useful information and resources such as running costs for typical

appliances, ways to save energy at home and in the workplace, and how to conduct an audit.

Change management

Change is the process of undergoing a transformation, transition or substitution from a current state

to a future state. The forces that drive change in society are complex and multidimensional.

Particularly important is the interplay between technological development and the impact on human

behaviour and perception. Human history demonstrates an ongoing process of change under the

influence of technological, environmental, and social factors. The impacts of industrialisation have

contributed to remarkable change in the economies and societies of the modern world. This process

of continual change looks set to continue.

Changing our behaviour can occur in small ways (switching lights off) or large ways (restructuring

processes and procedures or implementing new technology) or radical ways (totally changing your

lifestyle). Behaviour shifts often takes some significant event that makes people or organisations

think about what they do, think and feel about an issue or existing behaviour. In terms of businesses,

changes in legislation (such as the introduction of the Clean Energy Package, or the Energy Efficiency

Opportunities program) can be a catalyst for change.

Two types of change can be characterised- technical (one-off) and behaviour (repetitive).

Technical change– things we can ‘fix’ which create savings without any further human involvement

after the initial change. This is usually a one off action, often requiring some specialist or technical

support. For example:

http://www.saveenergy.vic.gov.au/

http://www.resourcesmart.vic.gov.au/for_households/energy.html

http://www.savepower.nsw.gov.au/

http://www.sa.gov.au/subject/Water%2C+energy+and+environment/Energy/Energy+efficiency


• lighting – removing some lamps/globes from over-lit areas in reception

• hot water – replacing electrically powered hot water service with gas powered

• heating – reduce the temperature set on the thermostat in the office

• fuel switching – replacing petrol powered fleet cars with hybrid fleet cars

Behaviour change – things we can do on an ongoing basis which require staff to act appropriately in

order for savings to be made. The initiating action is to develop the means (e.g. behaviour change

programs) by which staff are engaged to act accordingly. For example (and compare with the

examples above):

• lighting – turn off lights (and other energy using equipment) in unoccupied areas

• hot water – use cold water whenever possible

• heating – wear indoor clothing appropriate to the season;

• fuel – drive vehicles in an economical manner to reduce fuel consumption

Organisational change refers to the process of restructuring resources (human and technical) to

increase efficiency and effectiveness.

Managing change is a tricky task. Change management is a systematic approach to dealing with

change at an individual and organisational level. Change management includes:

processes for initiating and responding to change

tools for implementing the change process

techniques to manage the people side of the change process

Change management is a dynamic practice that has at least three aspects; adapting to change,

controlling change and effecting change. There are many different models and theories of change

which can be used to guide change management.


Eco-efficiency and resource efficiency

Eco-efficiency (or resource efficiency) is defined as ‘doing more with less’. The World Business

Council for Sustainable Development (WBCSD) defines eco-efficiency as ‘the delivery of competitively

priced goods and services that satisfy human needs and bring quality of life, while progressively

reducing ecological impact and resource intensity throughout the life cycle, to a level at least in line

with the Earth’s estimated carrying capacity. In short, it is concerned with creating more value with

less impact’18.

The WBCSD have identified seven principles of eco-efficiency

Reduce the material intensity of goods and services

Reduce the energy intensity of goods and services

Reduce the dispersion of any toxic substances

Enhance the recyclability of materials

Maximise sustainable use of renewable resources

Extend the durability of products

Increase the service intensity of goods and services There are four areas that provide eco-efficiency opportunities, as represented in the diagram below

(Figure 18).

Figure 18: Navigating eco-efficient opportunities

Source: WBCSD (2000) Eco-efficiency- creating more value with less impact. © WBCSD 2000.

http://www.wbcsd.org/web/publications/eco_efficiency_creating_more_value.pdf Accessed 27.06.10

Many organisations are now looking at eco-efficiency opportunities across their operations. For

example, Ikea introduced flat-pack furniture as a way to more efficiently transport goods, reducing

fuel consumption and costs, and lowering emissions. Other Ikea eco-efficiency initiatives across the

product life cycle can be found at:

http://www.ikea.com/au/en/ts_dynamic/dynamiclist/filt_nel_glob?filter=-1

18

World Business Council for Sustainable Development (2000). Eco-efficiency- creating more value with less impact (p4). http://www.wbcsd.org/web/publications/eco_efficiency_creating_more_value.pdf Accessed 26.06.12

http://www.wbcsd.org/web/publications/eco_efficiency_creating_more_value.pdf%20Accessed%2027.06.10

http://www.ikea.com/au/en/ts_dynamic/dynamiclist/filt_nel_glob?filter=-1

http://www.wbcsd.org/web/publications/eco_efficiency_creating_more_value.pdf


Eco-Efficiency

For learn more about eco-efficiency, the WBCSD have a learning module that can be accessed online

http://www.wbcsd.org/pages/EDocument/EDocumentDetails.aspx?ID=13593&NoSearchContextKey

=true

The EcoBiz programme run by the Queensland Government assists business to identify eco-

efficiency opportunities http://www.derm.qld.gov.au/ecobiz/

The Victorian EPA has Hints and Tips for Improving Resource Efficiency in your Business

http://www.epa.vic.gov.au/bus/resource_efficiency/default.asp

Sustainability Victoria has a Simple Guide to Reducing Waste for the Resource Efficient Builder

http://www.sustainability.vic.gov.au/resources/documents/Waste_Guidelines1.pdf

Lean enterprises

Lean enterprises (or lean production/manufacturing) refer to the practice of reviewing current

operations to consider how operations and processes can be optimised to reduce waste and

increase efficiency and worker productivity. This is undertaken by reviewing processes at a high level

view (systems approach), and subsequently working towards more detailed views to identify

opportunities for improvement. This can include minimising the movement of workers or machinery

within a workplace, minimising storage requirements and minimising waste production.

Understanding the life cycle of products and services

Prior to the industrial revolution, goods and services had generally been produced at the local level

by local people, near where they are consumed. Only goods and services of extraordinarily high

value were traded over large distances. As faster more efficient forms of transport developed, more

goods and services could be provided from greater distances. The industrial revolution also brought

greater urbanisation and the capacity for mass production through the harnessing of a variety of

formerly unavailable sources and forms of energy, in particular fossil fuels:

coal to power the steam engine

the internal combustion engine to power transport and many other processes.

the steam turbine to produce electricity

Modern production processes have reduced in real terms the cost of virtually all consumer items

and many commodities as well. One of the consequences of this has been the devaluing in the eyes

of the consumer, the goods, and less often, services purchased. This ‘devaluing’ has, in turn, lead to

the tendency to dispose of, rather than preserve or repair the newly depreciated goods, and the so

called ‘throw away mentality’. Competitive pressures on profit margins, particularly in areas where

http://www.wbcsd.org/pages/EDocument/EDocumentDetails.aspx?ID=13593&NoSearchContextKey=true

http://www.wbcsd.org/pages/EDocument/EDocumentDetails.aspx?ID=13593&NoSearchContextKey=true

http://www.derm.qld.gov.au/ecobiz/

http://www.epa.vic.gov.au/bus/resource_efficiency/default.asp

http://www.sustainability.vic.gov.au/resources/documents/Waste_Guidelines1.pdf


the goods or services have been commoditised, have resulted in the need for producers to

encourage disposal and replacement and discourage preserve and repair in order to maintain

profitability. This is loosely what is known as consumerism.

Modern production processes found their genesis in the early 20th century, typified by the advent of

the production line. The production line generally refers to a system by which individuals or

machines repeat the same part of the manufacturing process many times as the product makes its

way from raw materials or parts at one end to completion at the other. It can also be extended as a

metaphor for a linear process, where, in the overall scheme, raw materials are extracted at one end,

and the finished product is disposed of at the other end after it has ceased to serve its original

purpose. In some senses this could be considered to be the birth of consumerism. The linear nature

of this process tacitly assumes an infinite supply of raw materials, and infinite capacity to dispose of

waste. In the early 20th century, on a global, if not local scale, this appeared to be the case.

Increasing development and consumption multiplied by increasing populations has brought into

focus the reality, that both supply of raw materials and the ability of nature to assimilate waste are

definitely finite.

Life Cycle Assessment (LCA) seeks to identify the true environmental impact of a product by

considering its environmental effect at every stage of its ‘life cycle’.

Raw Materials Manufacture Use Disposal

The concept of conducting a detailed examination of the life cycle of a product or a process is a

relatively recent one which emerged in response to increased environmental awareness on the part

of the general public, industry and governments. LCAs were an obvious extension, and became vital

to support the development of eco-labelling schemes which are operating or planned in a number of

countries around the world. In order for eco-labels to be granted to chosen products, the awarding

authority needs to be able to evaluate the manufacturing processes involved, the energy

consumption in manufacture and use, and the amount and type of waste generated.

Assessing designs in terms of their environmental impact can be complex. There may be cases where

one option is better in terms of resource use, while another has a better emissions profile.

Assessing products from a life cycle point of view can be difficult, given the wide range of possible

impacts - both positive and negative. For example, if plastic is recycled, the process eliminates the

negative impacts associated with oil extraction and refining, as well as the manufacture of virgin

polymers. At the same time, the recycling process can have negative impacts, in this case relating

particularly to the collection of a bulky material, and to polymer separation and processing.

The use of energy and water are examples of environmental impacts that need to be considered

over the whole of a product’s life. As with waste, and issues about replacement, such concerns can

be analysed particularly effectively using two inter-related techniques:

The product life cost. In the past this has been primarily a way of assessing ‘cost of

ownership’ throughout life, which totals capital cost, running costs, servicing and

maintenance, and eventually disposal. The concept can however be extended to cover the


product’s impact on the environment and/or the energy involved in the activities,

remembering that all purchased materials will have consumed energy at all stages from the

extraction of raw materials to final manufacture.

The product life cycle approach looks at the total interrelationship from raw materials,

through manufacture of the product, to its use, and disposal through to recycling to create

new raw material. LCA is a potentially powerful tool which can assist regulators to formulate

environmental legislation, help manufacturers analyse their processes and improve their

products, and perhaps enable consumers to make more informed choices. However, many

LCAs have reached different and sometimes contradictory conclusions about similar

products. There are many assumptions that are made, and variables which can be given

different weightings. Even if these are accounted for, there are difficulties in comparing the

results. How does one, for example, compare water use with energy use, and will this

comparison vary from place to place? It seems likely that, in the case of manufactured

goods, the most important time for LCA information to be taken into consideration is at the

design stage of new products. Where LCA is used to evaluate procedures rather than

products, the information can help ensure appropriate choices are made.

Case study: Life cycle thinking at The Gordon Culinary School

The Gordon Culinary School, part of The Gordon TAFE, applied a Life Cycle Thinking and

Management approach across all of its hospitality and cookery operations to form the foundation of

a best-practice sustainability model - a first in this type of service industry. Since the sustainability

initiatives have been in place, initial environmental measurements indicate The Gordon Culinary

School is on track to meet expected targets. Across May and June 2011 alone, waste to landfill

decreased by 40% compared to the same time in 2010 and comingle (glass and plastics) increased by

82%, demonstrating a significant shift in waste disposal behaviour across the Culinary School in a

short period of time.

To view the full case study, visit

http://www.resourcesmart.vic.gov.au/documents/The_Gordon_sustainability_case_study.pdf

http://www.resourcesmart.vic.gov.au/documents/The_Gordon_sustainability_case_study.pdf


Embodied energy

Embodied energy is the sum of all the energy required to produce goods or services, from the mining

and processing of natural resources to manufacturing, transport and product delivery. The term

‘embodied’ refers to the analogy that all the energy from the production process is encapsulated

within the product itself. Embodied energy differs from LCAs in that it does not refer to the

operation or disposal of products. It is important to consider the embodied energy of materials or

products as it can guide choices in the design and manufacture or construction phase.

Embodied energy is most often associated with building materials. Building materials differ widely in

their embodied energy. For example timber has a much lower embodied energy than aluminium

(Figure 19). Materials with low embodied energy (e.g. timber, bricks, concrete) are typically used in

larger quantities than materials with higher embodied energy (e.g. copper, aluminium, stainless

steel). As a result, the share of total embodied energy in a building can be either from low embodied

energy materials such as concrete, or high embodied energy materials such as steel19. A more useful

approach in comparing embodied energy may be to consider the final components or assemblies

rather than individual materials.

A note of caution in using embodied energy data

The actual embodied energy of a material manufactured and used in Melbourne will be very

different if the same material is transported by road to Darwin.

Aluminium from a recycled source will contain less than ten per cent of the embodied energy of

aluminium manufactured from raw materials.

High monetary value, high embodied energy materials, such as stainless steel, will almost certainly

be recycled many times, reducing their lifecycle impact.

Source: Your Home Technical Manual. http://www.yourhome.gov.au/technical/fs52.html

19

Your Home Technical Manual.5.2 Embodied Energy. http://www.yourhome.gov.au/technical/fs52.html Accessed 26.06.12

Blue Box = Embodied Energy

Green Box = Product / Service Produced

http://www.yourhome.gov.au/technical/fs52.html



Figure 19: Embodied energy (MJ/kg) for some common materials

Source: Data from table in Your Home Technical Manual. http://www.yourhome.gov.au/technical/fs52.html

Examples of opportunities to reduce embodied energy

Design for long life and adaptability, using durable low maintenance materials.

Ensure materials from demolition of existing buildings, and construction wastes are reused or

recycled.

Avoid building a bigger house than you need. This will save materials.

Modify or refurbish instead of demolishing or adding.

Use locally sourced materials (including materials salvaged on site) to reduce transport.

Avoid wasteful material use.

Ensure off-cuts are recycled and avoid redundant structure, etc. Some very energy intensive finishes,

such as paints, often have high wastage levels.

Source: Your Home Technical Manual. http://www.yourhome.gov.au/technical/fs52.html

Waste energy

A sustainable business (i.e. one that reduces its use of natural resources, and also uses resources

efficiently) and business sustainability (i.e. one that is profitable and viable over the long term)

requires costly inputs to be used efficiently in order to minimise waste. As noted earlier in this




resource, energy costs will continue to rise due to a number of factors, so reducing energy waste

makes business and environmental sense.

Energy can be wasted in many ways in different sectors of the economy. Some of these are outlined

below.

Compressed air: Compressed air contributes approximately 10% of industrial energy consumption.

There can be significant wastage from leaks and system inefficiencies in compressed air systems

(Figure 20). Improving the energy of the system or redesigning the system can reduce energy waste.

Figure 20: Compressed air usage and potential savings for the typical compressed air

user

Source: Energy Efficiency Best Practice Guide Compressed Air Systems.

http://www.resourcesmart.vic.gov.au/documents/BP_Air_Manual.pdf Accessed 26.06.10

Waste heat: Many pieces of industrial (and some household) equipment and some industrial

processes produce heat which is not used. Some of the waste heat can be recovered to be used in

new processes (Table 2). The Energy Efficiency Exchange website provides information on reducing

heat waste and heat recovery- http://eex.gov.au/technologies/process-heating-and-steam-systems/

http://www.resourcesmart.vic.gov.au/documents/BP_Air_Manual.pdf

http://eex.gov.au/technologies/process-heating-and-steam-systems/


Table 2: Examples of heat recovery in the food processing industry

Source: Eco-efficiency toolkit for the Queensland Food Processing Industry.

http://ww2.gpem.uq.edu.au/CleanProd/food_project/Food%20Manual.pdf Accessed 26.06.10

Fuel use in transport: There are many ways to waste energy in daily transport activities, whether

this be personal transport, or in commercial applications. Unnecessary vehicle idling, such as trucks

waiting to be loaded or unloaded, wastes energy. Unnecessary driving, or poor route planning can

also waste energy. Network mapping applications and fleet tracking provides opportunities to

reduce such transport wastes. Other smaller changes, such as ensuring tyres are at the correct

pressure (too low a pressure increases fuel use), and avoiding hard acceleration, also reduces energy

waste.

Reusing and recycling material: As the section on embodied energy noted, new products can have a

significant amount of embodied energy from the production process. Reusing or recycling products,

whether they be building material (e.g. bricks, tiles, steel etc) or household items such as plastic or

aluminium containers can reduce the energy waste resulting from simply disposing of such material.

http://ww2.gpem.uq.edu.au/CleanProd/food_project/Food%20Manual.pdf


How much energy is saved from recycling?

Producing one aluminium can from raw materials requires the same amount of energy as producing

20 cans from recycled materials.

Using recycled steel cans to produce new steel (rather than raw materials), uses up to 75% less

energy.

Recycling PET bottles saves 84% of the energy it takes to make PET bottles from raw materials.

Source: SITA Facts about recycling. http://www.sita.com.au/media/fact_sheets/AL_Facts_24.1.12.pdf

Ecorecycle Plastics Recycling: www.ecorecycle.sustainability.vic.gov.au/.../Info_6_-_Plastic.doc

Electricity supply waste: Our centralised electricity generation, where power generators are often

located far from end users, leads to a considerable amount of energy waste during the process of

generation and transmission to the consumer.

“Nationally, according to published data, some 7% of electricity generated is

consumed in internal losses and auxiliaries consumption at the power station,

with the balance being net ‘electricity sent out’. Losses following in the national

transmission system are also substantial, typically another 7% through the step-

up transformers, switching stations and the nearly 40,000km of high voltage

overhead and underground transmission lines and cables (220kV up to 500kV)

that interconnect and span Australia’s states. A further 7% - 9% or more,

depending on numerous local factors, is lost in lower voltage more scattered

customer distribution systems, typically from 132kV down to 240V single phase

at the average domestic customer’s meter.”

Source: Thomas, M. Electricity Losses- do they matter? http://www.eesa.asn.au/sites/default/files/articles/electricity-losses-martin-

thomas-am/Electricity_Losses_Article_-_Martin_Thomas.pdf

In addition to the energy waste during supply and transmission, there is energy waste at the

consumer end, through standby power, waste heat from lighting, heat loss from hot water systems

and piping etc.

Sustainable consumption and purchasing

Purchasing decisions can have big impacts on energy, from the energy used to produce a product or

deliver a service, to the energy consumed during a product’s operation, and the energy that can be

recovered from reuse or recycling at the end of its life, or whether it needs to go to landfill.

The Story of Stuff

The Story of Stuff [http://www.storyofstuff.org/movies-all/story-of-stuff/] is an animated

documentary that tracks the production process for consumer items, from extraction of raw

http://www.sita.com.au/media/fact_sheets/AL_Facts_24.1.12.pdf

http://www.ecorecycle.sustainability.vic.gov.au/.../Info_6_-_Plastic.doc

http://www.eesa.asn.au/sites/default/files/articles/electricity-losses-martin-thomas-am/Electricity_Losses_Article_-_Martin_Thomas.pdf

http://www.eesa.asn.au/sites/default/files/articles/electricity-losses-martin-thomas-am/Electricity_Losses_Article_-_Martin_Thomas.pdf

http://www.storyofstuff.org/movies-all/story-of-stuff/


material to the disposal. The Story of Stuff Project [http://www.storyofstuff.org/]now provides a

number of short animations on different consumer subjects such as bottled water and electronics.

Many government departments and organisations have sustainable procurement guides to advise

staff on purchasing or procuring goods and services.

Supermarkets and other large retailers can influence energy efficiency and wider sustainability

through their supply chain. See http://www.ecosmagazine.com/?paper=EC156p18

Organisations like ECO-Buy can also assist organisations in implementing sustainable procurement

and building a green supply chain. http://www.ecobuy.org.au/

Benefits of sustainable purchasing

Sustainable purchasing has a number of benefits20:

Reduce energy and water consumption (which can reduce costs)

Improve resource use efficiency

Reduce waste (which can reduce waste disposal costs)

Reduce environmental health impacts of products and services

Reduce pollution

Provide markets for new environmentally preferable products

“Close the loop” on recycling, improving the viability of recycling

Provide leadership to the community

20

Australian Government Environmental Purchasing Guide.

http://www.environment.gov.au/settlements/publications/government/purchasing/purchasing-guide/pubs/purchasing-guide.pdf

http://www.storyofstuff.org/

http://www.ecosmagazine.com/?paper=EC156p18

http://www.ecobuy.org.au/

http://www.ecobuy.org.au/

http://www.environment.gov.au/settlements/publications/government/purchasing/purchasing-guide/pubs/purchasing-guide.pdf


Encourage industry to adopt cleaner technologies and produce products with lower

environmental impacts

Considerations when purchasing

In thinking about your next purchasing decision, consider the following questions:

Is the product needed? Could it be purchased second hand, or can a current product be serviced or

reconditioned?

What is the product made from? Was it (part or fully) made from recycled material, recyclable

material, or raw material that was sustainably sourced?

Can the product be recycled, or does the manufacturer have a ‘take back’ policy?

Does it have an environmental certification?

Does it have labelling providing advice as to its operational energy and water consumption use and

costs?

What is the embodied energy in the product?

Will the product last? Is it well made? Does it come with a warranty?

Eco-labelling helps guide consumer choices

Good Environmental Choice Australia (GECA) provides a life-cycle based ecolabel to encourage the

development of sustainable goods and services. There are over 2000 certified products on the GECA

website. http://www.geca.org.au/

There are a wide range of eco-labels in the marketplace covering environmental and social

sustainability claims. See http://www.greenbeings.com.au/tips/Eco-Labels.aspx for a list and links to

other eco-labels.

http://www.geca.org.au/

http://www.greenbeings.com.au/tips/Eco-Labels.aspx


References

Alcott, B. (2005) Jevons’ Paradox. Ecological Economics. 54 (1), 1 July: 9 – 21.

http://www.sciencedirect.com/science/article/pii/S0921800905001084 Accessed 18.06.11

Australian Bureau of Statistics State and Territory Statistical Indicators (1367.0) 2012.

http://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/1367.0~2012~Main%20Features~

Australia%20Home~1 Accessed 14.06.12

Bureau of Resources and Energy Economics (2012). Economic Analysis of End-use Energy Intensity in

Australia. http://www.bree.gov.au/publications/energy/index.html Accessed 14.06.12

Bureau of Resources and Energy Economics (2012). Energy in Australia.


Campbell, N (2012). Spreading the Net: The Multiple Benefits of Energy Efficiency. Presentation at

the International Energy Agency (IEA) Energy Efficiency Week, 14 March 2012.

http://www.iea.org/media/workshops/2012/energyefficiency/Campbell.pdf Accessed 18.06.12

Cement Australia (2011). Energy Efficiency Opportunities Public Report 2011.

http://www.cementaustralia.com.au/wps/wcm/connect/website/cement/resources/fad8f700497cb

1a7943c96efc448b82a/EEO-PublicReport-2011.pdf Accessed 18.06.12

ClimateWorks Australia (2011). Low Carbon Growth Plan for Australia, Impact of the Carbon Price

Package. August 2011 Revised Edition.

http://www.climateworksaustralia.org/LCGP_Impact_of_the_carbon_price_package_Aug_2011_revi

sed_edition.pdf Accessed 20.06.12

Climate Works (2012). How to make the most of demand management.

http://www.climateworksaustralia.com/Improving_impact_measurement.pdf Accessed 26.06.12

Department of Climate Change and Energy Efficiency. (2011) Australian National Greenhouse

Accounts, Quarterly Update of Australia’s National Greenhouse Gas Inventory, December Quarter

2011. http://www.climatechange.gov.au/en/publications/greenhouse-acctg/national-greenhouse-

gas-inventory-2011-12.aspx Accessed 18.06.12

Department of Environment, Water, Heritage and the Arts (2008). Energy Use in The Australian

Residential Sector 1986 – 2020. http://www.climatechange.gov.au/what-you-need-to-

know/buildings/publications/energy-use.aspx Accessed 18.06.11

International Energy Agency (2010) Key World Energy Statistics.

http://www.iea.org/textbase/nppdf/free/2010/key_stats_2010.pdf Accessed 14.06.12

McIvor, A (2010) Mining and Energy. http://www.cleantechinvestor.com/portal/fuel-cells/6422-

mining-and-energy.html Accessed 26.06.12

http://www.sciencedirect.com/science/article/pii/S0921800905001084




http://www.iea.org/media/workshops/2012/energyefficiency/Campbell.pdf

http://www.cementaustralia.com.au/wps/wcm/connect/website/cement/resources/fad8f700497cb1a7943c96efc448b82a/EEO-PublicReport-2011.pdf

http://www.cementaustralia.com.au/wps/wcm/connect/website/cement/resources/fad8f700497cb1a7943c96efc448b82a/EEO-PublicReport-2011.pdf



http://www.climateworksaustralia.com/Improving_impact_measurement.pdf





http://www.iea.org/textbase/nppdf/free/2010/key_stats_2010.pdf%20Accessed%2014.06.12




Pagan,R, Prasad, P, Price, N & Kemp, E (2004). Eco-efficiency for the Queensland Food Processing

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28.06.12

Townsville: Queensland Solar City (2011). Annual Report.

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